TaxTMI 
TaxTMI 
1981 (1) TMI 88
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....ther expenses. The assessee claimed that in bringing down the valuation by 25 per cent there were several factors which obliged him to take a decision to undervalue the stock by 25 per cent. Apart from the cost of chemicals which were applied to the stocks before selling, the assessee also had to account for the discount that he allowed on the sales made by him. The ITO, however, did not agree to his submissions because, in this view the pleas raised by the assessee were of general nature. However, he accepted the admitted principle of reduction and undervalued the stocks by 15.8 per cent instead of 25 per cent claimed by the assessee. According to the ITO 15.8 per cent was the gross rate of profit and, therefore, to enable the assessee to ....
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....been treated with chemicals for re-stamping and some of the items in the stock being of low quality, would have been sold at a lower price, the gross profit as shown in the books of account appears to be reasonable criteria for determining the value of closing stock of rubber belting. As far as my observation in the earlier paragraph that opening stock is adjusted then the closing stock of previous year will have to be adjusted and the net results if both the years are taken into consideration would be Nil. Consequently the rate at which deduction should be made from the value determined on the basis of market price as adopted by the ITO being comparatively more scientific than the one adopted by the appellant, it is upheld. Therefore, addi....
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.... on the order of the AAC. He submitted that there was no scope for interfering with the finding of the ITO, which was upheld by the AAC. The ITO had given a reason for adopting the rate of 15.8 per cent for working out the deduction. It was the rate which corresponded to the G.P. rate of the year. The rate of deduction of 25 per cent claimed by the assessee was far higher than the rate of deduction based on the G.P. rate which was adopted by the ITO. and was upheld by the AAC. 4. Having heard the rival submissions we are inclined to find force in the submissions of the assessee. Adopting the rate of 15.8 per cent requires adjustment not of the opening stock but of the stocks of the proceeding years. It will not only unsettle the trading ....
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....orked out shortage of 750 metres of canvas cloth, he worked out the value at Rs. 12 per metre. Excluding the value of the canvas shown, he treated the difference as the value of the unaccounted stock in the possession of the assessee. The difference he worked out at Rs. 12,261 which he added to the income of the assessee. The AAC confirming the addition, however, reduced the quantum of addition to Rs. 8,250. Reason for allowing the relief was in adopting a rate lower than that adopted by the ITO to work out the value of 750 metres of canvas cloth. 6. The assessee raised the plea before us which he had raised before the lower authorities. Referring to the details available after 15th March, 1976 and purchases from April 1975 to March, 197....